| Urbanization, growing incomes and changing diets have facilitated the supermarket revolution in Malaysia. To incorporate supermarkets into contract farming to improve farmer livelihoods, Malaysia's Federal Agricultural Marketing Authority (FAMA) is spearheading programs following the re-focus on agriculture as "an engine of growth" in the Ninth (2006-2010) and Tenth Malaysia Plans (2011-2015). This study examines the influence of supermarkets on the food supply chain, especially on contract farmers, in order to understand new linkages in Malaysia's food system and agricultural policies. Based on an extensive literature review and interviews with FAMA and supermarket representatives, this study finds that contract farming is a useful effort to increase farmer involvement in the supermarket supply chain, though there has been little participation from supermarkets. New incentives and policies that promote sustainable business practices and support for local agriculture could encourage supermarkets to source from smallholder farmers. Vertical integration by supermarkets and increasing consumer awareness of the benefits of buying local could affect change on the sourcing practices of supermarkets. |
